Last chance for former power directors

Former directors of two state power companies, who resigned in protest over the $5.3 billion sale of NSW electricity assets, will be given another week to appear before a parliamentary inquiry into the controversial transaction.

The directors, who include former Labor minister
Michael Knight
, were expected to give evidence today but all have refused to appear after the decision by Premier
Kristina Keneally
to shut down parliament before Christmas, in effect robbing them of certainty around parliamentary privilege.

The committee holding the inquiry plans to send the directors legal advice from senior counsel Bret Walker supporting its view that it can operate as normal. If the directors still refuse to appear, the committee will consider going to the Supreme Court next week to force their attendance.

Opposition Leader Barry O’Farrell and shadow treasurer Mike Baird will give evidence today. They will be grilled about their energy policy, the Coalition’s plan for a judicial review of the sale and whether it would consider reversing transactions already completed.

Last month, the government announced the sale of three energy retailers and two generation assets to Hong Kong-owned TRUenergy and
Origin Energy
. Those transactions will be completed in March, days before the government moves into caretaker mode before the election.

Mr Baird has refused to rule out undoing those deals. “We reserve the right to take any actions that are in the interests of the state," he said.

Both TRUenergy and Origin have said the deals can’t be undone.

A spokesman for Origin said: “In good faith, Origin entered into a series of legally binding contracts with NSW state-owned corporations in relation to the Energy Reform process."

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TRUenergy managing director Richard McIndoe said earlier this month that “unravelling it [the deal] would be pretty, pretty challenging".

The position of bidders for the remaining two assets is less clear. Final bids for the two power-generation assets are due by the end of this month and the government said it would make an announcement next month. This makes it almost impossible for potential buyers to complete the transaction before the election.

Treasurer
Eric Roozendaal
said last week that public comments by the Coalition about reversing the transaction had unnerved some bidders.

Mr Baird said the Coalition’s judicial review would also look at the state’s move back into coalmining. As part of the electricity privatisation, the government said it would spend $1.5 billion developing the Cobbora coalmine in central NSW to supply the power stations with cheap fuel. Once the mine is operating, it could be sold back to the private sector.

However, Mr Baird said it was not clear whether there would be any interest in the mine.

“We don’t know whether it will produce a dollar of profit and if it doesn’t produce a dollar of profit, is it actually going to sell for anything?" he said.